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Central Electricity Regulatory Commission (CERC) has given an extension of six months, beginning August 15, to power exchanges to carry out clearing and settlement of trades on their platforms as per the Payment and Settlement Systems Act (PSSA), 2007.
PSSA 2007 provides for regulation and supervision of payment systems in India and designates the Reserve Bank of India (RBI) as the authority including matters related to it.
Under Regulation 27 of the CERC (Power Market) Regulations 2021 (PMR 2021), a power exchange has to carry out clearing and settlement of any transaction of electricity undertaken on the exchange in accordance with the provisions of the PSSA 2007.
Last week, the Commission in a suo-motu order said that it has considered the extension requests from power exchanges and the discussions held so far.
It was of the view that an indefinite extension to comply with the provisions of Regulation 27(1) of the PMR 2021 cannot be granted. However, given the operational and procedural requirements for compliance, a brief additional period needs to be allowed.
“The Commission has directed all three power exchanges to align their clearing and settlement systems to the provisions of the PSS Act, 2007, within a period of six months w.e.f. August 15, 2024,” it added.
Power exchanges
At present, India has three power exchanges — Indian Energy Exchange (IEX), Power Exchange India (PXIL) and Hindustan Power Exchange (HPX).
On August 12, 2022, the CERC had allowed a one-year extension, from August 15, 2022, to the exchanges to align their clearing and settlement system to the provisions of the PSS Act, 2007, in view of the operational difficulties highlighted by the Power Exchanges.
Besides, the regulator during that time had also directed its staff to examine the issues involved in carrying out clearing and settlement in accordance with the PSS Act, 2007, in consultation with the Ministry of Finance and RBI, and to draw a roadmap for implementation of the same in line with Regulation 27 of PMR 2021.
A year later, the Commission again granted a one-year extension, from August 15, 2023, to the exchanges due to the ongoing discussions between the staff of CERC and RBI and the requests for extension received from the power exchanges.
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